(Alliance News) - Shaftesbury on Tuesday reported a widened interim loss as lockdowns crippled activity in London's West End, but the property landlord's outlook was upbeat following the easing of virus restrictions.
Net property income fell 43% to GBP26.5 million in the six months to March 31 due to occupier support, reduced rent collections, and increased vacancy in the period, with rental income down 19% on a like-for-like basis. Shaftesbury's pretax loss widened to GBP338.5 million from GBP287.6 million.
Shaftesbury is a real estate investment trust focused on London's West End shopping and theatre district. EPRA net tangible assets per share was GBP5.83 at the period-end, down from GBP7.43 at the end of September and GBP8.78 at the end of March a year ago.
However, Shaftesbury said that, following 15 months of disruption, the phased lifting of virus restrictions is already resulting in a return of confidence and activity. Footfall and spending are recovering, it said, while hospitality and retail businesses have reopened.
"Since the start of re-opening on 12 April, we are seeing an encouraging increase in demand for space and lettings and a return of footfall and spending across our locations. Forecasts point to a sharp rebound in the UK economy, but there remains the risk that the recovery could encounter delays and setbacks in the period ahead," said Chief Executive Brian Bickell.
Shaftesbury declared an interim dividend of 2.4p, versus nothing a year ago. It said this small payment was to fulfil its property income distribution requirements as a tax-exempt REIT for the financial year that ended September 30, 2020.
A return to more generous payouts will need to wait.
"While macro uncertainty persists, and our operating cash inflows are reduced, we will continue to prioritise the preservation of liquidity. However, our intention is to resume dividend payments as soon as we consider prudent, in line with our policy of sustainable dividend growth over the long term," the firm said.
In financial 2019, Shaftesbury paid a total of 17.7p.
Shaftesbury shares were down 0.4% early Tuesday, while the wider FTSE 250 index was up 0.4%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,056.08
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Hang Seng: up 1.6% at 28,878.79
Nikkei 225: closed up 0.7% at 28,553.98
DJIA: closed up 186.14 points, or 0.5%, at 34,393.98
S&P 500: closed up 41.19 points, or 1.0%, at 4,197.05
Nasdaq Composite: closed up 190.18 points, or 1.4%, at 13,661.17
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EUR: up at USD1.2249 (USD1.2222)
GBP: up at USD1.4198 (USD1.4157)
USD: down at JPY108.64 (JPY108.75)
Gold: up at USD1,885.89 per ounce (USD1,884.66)
Oil (Brent): up at USD68.68 a barrel (USD68.00)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come
EU European Council special meeting of EU heads of state concludes.
1000 CEST Germany Ifo business climate index
1100 BST UK CBI distributive trades survey
1000 EDT US Fed chair presents Monetary Policy Report to US Senate Banking Committee
1000 EDT US new residential sales
1000 EDT US consumer confidence index
1630 EDT US API weekly statistical bulletin
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European Council President Charles Michel said Minsk was playing "Russian roulette" after a Ryanair flight was diverted and a prominent critic arrested in Belarus. Journalist Roman Protasevich was on board a Ryanair flight from Athens to Vilnius on Sunday when it was forced to change course to head for the Belarussian capital after a reported bomb scare, escorted by a MiG fighter jet. He was arrested and, in a video released by Belarusian authorities on Monday evening, appeared to admit he was involved in organising mass protests in Minsk last year. The EU and the UK have issued new sanctions against Belarus in light of the incident, with UK Transport Secretary Grant Shapps instructing the Civil Aviation Authority to request airlines avoid Belarusian air space "to keep passengers safe".
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The German economy fared slightly worse than initially expected at the start of 2021, revised figures from Destatis showed. Gross domestic product shrank 1.8% quarter-on-quarter in the first three months of the year. This previously had been first reported as a 1.7% contraction, and follows 0.5% growth in the fourth quarter of 2020. Year-on-year, GDP fell 3.1%, also a touch worse than the 3.0% decline initially estimated. This is still improved from a 3.3% fall in the final quarter of 2020. Compared with the fourth quarter of 2019, the quarter before the Covid crisis began, GDP was 5.0% lower in the first quarter of 2021.
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BROKER RATING CHANGES
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RBC RAISES OXFORD BIOMEDICA PRICE TARGET TO 1,200 (1,050) PENCE - 'OUTPERFORM'
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BERNSTEIN RAISES ROYAL MAIL PRICE TARGET TO 575 (400) PENCE - 'MARKET-PERFORM'
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BERENBERG RAISES MJ GLEESON PRICE TARGET TO 900 (840) PENCE - 'BUY'
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COMPANIES - FTSE 100
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The UK Competition & Markets Authority said it is considering whether AstraZeneca's takeover of Alexion Pharmaceuticals will reduce competition. The regulator is inviting comments on the transaction to aid with its assessment. The deadline for its phase one decision is July 21. Earlier this month, both Alexion and AstraZeneca's shareholders voted in favour of the deal. AstraZeneca agreed to buy Alexion in December for USD39 billion to boost its work on immunology. The takeover has already been given the go-ahead by the US Federal Trade Commission in mid-April after competition clearances in Canada, Brazil and Russia, but Astra is still waiting on approval in the UK, EU and Japan.
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Smiths Group said it has hired Paul Keel as its new chief executive, replacing Andy Reynolds Smith who will step down from his role and the board with immediate effect. "The change has been mutually agreed as the right time to provide new leadership as Smiths enters into its next growth phase," it said. Keel has previously worked at 3M, within the US and UK, where in his time he led businesses including the Consumer Business Group. Smiths added that it remains committed to the separation of its Smiths Medical division, saying it is "actively engaging with all options to maximise value for all stakeholders and to provide the company with an enhanced platform for future growth." It said its full-year expectations are unchanged from its March update.
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Software firm Aveva reported a dip in annual revenue as it saw an improved second half following pandemic disruption, while recently acquired OSIsoft performed well. Revenue on a proforma basis slipped 1.4% to GBP1.20 billion for the financial year that ended March 31, but pretax profit shot up to GBP50.6 million from GBP19.0 million. On a statutory basis, which only includes 13 days trading from OSIsoft, revenue fell 1.6% to GBP820.4 million from GBP933.8 million, and pretax profit tumbled to GBP34.2 million from GBP92.0 million. Aveva completed its USD5.0 billion acquisition of real-time industrial data software firm OSIsoft on March 19. OSIsoft performed well in the full year ended March 31, Aveva said, achieving 6.6% growth on a constant currency basis. The firm proposed a 23.5 pence final dividend, up 1% on a year before after adjusting to reflect the bonus element of its recent rights issue.
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COMPANIES - FTSE 250
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Hill & Smith said it has made a "good start to the year" with revenue for the four months to the end of April up 10% on last year and ahead of 2019 levels. "We are also pleased to report a strong recovery in operating profit in comparison to the same period last year which was impacted by Covid-19 related disruption from the middle of March 2020," the infrastructure construction company said. It expects to see a recovery in trading in 2021, and full-year expectations remain unchanged.
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COMPANIES - MAIN MARKET AND AIM
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Pod Point has hired former Imperial Brands chief executive Gareth Davis as non-executive chair as it plans an initial public offering, Sky News reported on Monday. The appointment could be announced in the coming weeks, Sky reported, without citing its source. Pod Point, an electric vehicle charging network, is hoping to become a public company this year after appointing Bank of America and Barclays to oversee its IPO plans, according to the report. The firm also could go public through a merger with a US special purpose acquisition company. Majority owner Electricite de France is expected to keep a large stake after a flotation. Pod Point, which has nearly 4,000 charging points across the UK, is looking to gain from rising demand for electric vehicles.
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Tuesday's Shareholder Meetings
Aston Martin Lagonda Global Holdings PLC - AGM
Bank of Cyprus Holdings PLC - AGM
Bank of Georgia Group PLC - AGM
Bank of Ireland Group PLC - AGM
Edenville Energy PLC - GM re fundraising
Empiric Student Property PLC - AGM
Epwin Group PLC - AGM
Georgia Capital PLC - AGM
Harworth Group PLC - AGM
Hill & Smith Holdings PLC - AGM
Logistics Development Group PLC - AGM
Marlowe PLC - GM re approval on remuneration policy
Mortgage Advice Bureau Holdings PLC - AGM
OSB Group PLC - AGM
Quarto Group Inc - AGM
Restaurant Group PLC - AGM
Riverstone Energy Ltd - AGM
Serabi Gold PLC - AGM
Yew Grove REIT PLC - AGM
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By Tom Waite; thomaslwaite@alliancenews.com
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